See how Canadians are turning their money into Spock tributes

In a creative tribute to the passing of actor Leonard Nimoy last week, Canadians have started inking their $5 bills to make the currency’s figure resemble Spock.

The Canadian Design Resource, a group whose role is to connect designers with clients, put out a call for citizens to mark up their $5 bills, which features former Canadian Prime Minister Sir Wilfrid Laurier, this morning:

All the bill needs is a thick coating of ink to draw on jet black hair, some lengthy sideburns and Nimoy’s signature Spock eyebrows. “This series of Canadian bills was an easy target,” CDR’s publisher Todd Falkowsky told Quartz. “The existing portraits are quite large and can be improvised with easily, and the color of our $5s are the same blue as Spock’s uniform.”

But as Mashable reports, writing on Canadian currency isn’t quite legal. The site points out that “the Currency Act and The Canadian Criminal Code clearly state[s] that no person shall melt down, break up or use otherwise than as currency any coin that is legal tender in Canada.”

Mashable also writes that making a $5 note look like Spock isn’t exactly a new phenomenon. Canadian’s have reportedly been doing it for years.

A swanky room overlooking a sunny piazza in Rome costs a lot less this year. So does sipping espresso, nibbling on croissants, and dinning on steak frites in Parisian cafes.

Favorable currency exchange rates are making overseas travel far more affordable for Americans. Depending on the country, hotels, restaurants and shopping may be anywhere from 15% to 50% cheaper now than this time last year.

You can thank sputtering overseas economies for the more tourist-friendly prices. In the ever-changing currency markets, the U.S. dollar is once again in demand.

Of course, it’s welcome news for anyone who is planning an overseas trip. Some people who’ve been unable to afford international travel may finally be able take that dream vacation.

“It definitely has an impact, and yes, it does encourage people who are on the fence,” said Andi McClure-Mysza, co-president of Montrose Travel, a travel agency in Montrose, Calif., near Los Angeles, that books more than $280 million in travel annually.

Customers routinely bring up exchange rates in planning their trips and deciding where to go, she said. Getting a $5,000 vacation for $4,000, when taking into account potential savings, can be a powerful lure. Currency rates don’t affect airline ticket prices, which happen to be relatively high at the moment. But they can mean savings on what visitors spend their money on after arriving.

Keep in mind that package tours don’t necessarily take fluctuations in currencies into account. It depends on the operator and the contracts it cuts with hotel, restaurants and ground transportation suppliers.

Through the first 10 months of 2014, U.S. citizens made 57 million international trips, or 9.6% more than during the same period a year earlier. A buzzing U.S. economy – and those exchange rates – means more growth is likely in 2015.

Here are a few destinations where exchange rates will make your dollars stretch a lot further.

Hyundai Motor Co, the world’s fifth-biggest automaker when paired with Kia Motors Corp, expects currency risks to persist in Russia and other emerging markets this year, its president Lee Won-hee said on Thursday.

The automaker’s net profit fell 19% from a year earlier to 1.66 trillion won ($1.53 billion) in October-December, hit by a plunge in the Russian rouble and increased buying incentives in the United States.

Lee also said the automaker this year expects to maintain its average U.S. sales incentive at the 2014 level of $1,728 per vehicle.

In an unfortunate twist of fate, it looks like a lot of Interactive Brokers’ clients have joined the poor house. On Friday, the online trading firm, which allows individuals to place bets on currency moves and other investments, announced that “several” of its clients’ accounts had been completely wiped out by the jump in the Swiss franc on Thursday, creating huge losses for anyone betting against the currency. Betting that the Swiss franc would fall had become a popular bet that was considered safe. This week’s events have left the firm on the hook for $120 million in losses.

And Interactive Brokers’s clients weren’t even the worst hit. FXCM, the U.S.’s largest online brokerage for retail foreign currency trading, said many of its clients had been wiped out in the markets on Thursday as well. The firm said it was owed $225 million by clients who had lost everything in this week’s volatile currency markets. Both Interactive and FXCM focused on individual investors. U.K. brokerage IG Group said it had nearly $50 million in losses but that the firm’s financial condition remained “extremely robust.” Another retail broker in the U.K. Alpari said it was insolvent.

In the past few years, in the wake of the 2008 market crash, a growing number of individual investors have jumped into currency trading under the impression that it was a safer bet than stocks. On Thursday, when the euro, the dollar, and other currencies fell nearly 20% in one day versus the Swiss Franc, those investors learned just how wrong they were.

In January 2014, Citigroup released a report documenting the rising popularity of investing in currencies among individual investors, often called forex or FX trading, for foreign exchange. The Citi report said that the average daily volume of retail trading in one large FX market had doubled to 20% of the total market in 2012, or $400 billion in trades, from just over 10% in 2008.

The report estimated that the growing horde of retail FX traders, which it estimated at 4 million, were mostly male at an average age of 35. And most were small-time players. The average individual who was trading currencies in the U.S. had just $6,600 in their account.

But most believed their accounts were set to grow. The report cited a recent poll that had found that 84% of retail traders in the FX market believed they could make money during most months. In truth, the report said, only about 30% of individual investors make money trading currencies.

FXCM FXCM was one of the fastest growing firms that catered to individual investors interested in the currency market. In fact, Barron’s had referred to the firm as a “fast growing money machine.” The firm handled $1.4 trillion in trades by individuals in the last quarter, and had become the biggest online currency brokerage for retail investors, with over 230,000 accounts at the end of last year.

FXCM never promised its clients riches, but, at times, the company and its CEO appeared to play down the risks of swapping the Swiss Franc, say, for Polish Zlotys. In May 2013, FXCM’s CEO Drew Niv, who co-founded the company in 1999, told Bloomberg TV that currencies were no more risky than stocks or other assets. And FXCM ran a website DailyFX that sought to teach individuals how to make money in the currency market. A tab on the top of its website is titled “DailyFX for Beginners.” On Friday, there was no mention on the website of FXCM’s huge losses.

In December, Niv told Bloomberg Market’s magazine that leverage and the ability to trade more money than investors had on hand had drawn a lot of interest in the currency market from retail investors. “Currencies don’t move that much,” he told Bloomberg Markets. “So if you had no leverage, nobody would trade.”

Most of the clients that traded with FXCM lost money. Nearly 70% of FXCM’s client accounts lost money in 2014, according to a disclosure the company made with the CFTC. In 2013, FXCM paid Niv nearly $1.5 million in salary and non-stock incentive bonuses. Now, the company looks to be on the brink of failing. FXCM’s stock, which had been trading at around $11 on Wednesday evening, plunged 92% into the pennies in pre-market trading on Friday morning. The SEC halted trading in the stock, and it never opened on Friday. On Friday, FXCM secured $300 million in financing from Leucadia National to keep the currency trading firm afloat. “We are pleased to continue to act as the leading online provider of foreign exchange trading and related services to retail and institutional customers worldwide,” Niv said in an official statement from FXCM.

Interactive Brokers IBKR had also drawn many individual investors into the currency market. It was known for its often funny, and at times controversial, commercials. In 2012, Interactive Brokers’ founder, the Hungary native Thomas Peterffy, spent $8 million on ads urging people to vote Republican. In the ad, Peterffy said, “I grew up in a socialist country, and I have seen what that does to people.” On Friday, Interactive Brokers said the $120 million in client losses that it might have to cover amounted to less than 3% of the company’s assets. By late Friday, its shares were down by 1% to just under $28. Interactive Brokers did not immediately respond to a request for comment from Fortune.

The turmoil caused by Swiss Franc this week did deliver a few winners. Gain Capital, a Bedminster, N.J.-based currency brokerage firm, said that it made money on Thursday. Two years ago, FXCM had offered $210 million to buy Gain. Gain’s leadership rejected the bid. In retrospect, it looks like that was a very good move.

Correction: An earlier version of this story said that the IG Group was shutting down because of its customers’ losses. In fact, the company said its financial position remained “robust.”

3 ways the Swiss National Bank screwed up

The Swiss National Bank’s decision to remove its currency peg against the Euro on Thursday continues to send shock waves through the market. The decision was a complete surprise, as a bank official reaffirmed its commitment to the policy just two days before the peg was removed.

The decision has been costly for currency traders, with at least two big retail foreign exchange brokerages, New Zealand-based Excel Markets and Global Brokers, going bust overnight. It has also sent the value of the Swiss Franc soaring against both the euro and the dollar, as you can see below:

The decision is a curious one, as the Swiss Central Bank was coming under no real pressure to remove the peg. Inflation remains remarkably low in the country—last week, the Swiss government announced that prices fell by an annual rate of 0.3% in December, the lowest inflation reading since October 2013. While impending quantitative easing in Europe may force the Swiss Bank to step up its efforts to defend the currency, there is effectively no end to the Bank’s ability to buy foreign currencies to defend the peg, as the Swiss bank can just print more francs.

But even stranger was the bank’s decision to make this move just days after an official from the bank affirmed its commitment to the policy. Here are three ways the bank could have done better.

1.Give some forward guidance. Twenty or 30 years ago, it was par for the course for central banks to act in the shadows. Once upon a time, the Federal Reserve, for instance, didn’t even announce interest rate targets. It simply bought and sold bonds, and it was up to analysts to figure out what the bank was up to. But in recent decades, economists have begun to learn the power of communicating with markets and signaling moves beforehand. By giving what central bankers call forward guidance, they can shape the market’s expectations and smooth policy transitions. There’s simply no good rationale for dumping this decision on the markets just days after reassuring participants it would act otherwise.

2. Start small. If the bank was afraid that quantitative easing in Europe would send traders flocking to Swiss assets, it could have just lowered interest rates from -0.25% to -0.75%, as it did, and let the market react to that decision before taking more extreme measures.

3. Do nothing. With inflation and economic growth chronically slow across the world, and forecasts for global growth falling, the rationale for making any moves to tighten monetary policy is thin.

What the Swiss National Bank appears to be most concerned about, then, is politics. The Swiss have a long history of adhering to hard money policies and free market principles. Even in extraordinary times, the Swiss bristle against interventions like currency pegs. Furthermore, the Swiss bank is owned in part by private individuals, many of whom are worried about the possibility of the bank losing money on its foreign currency reserves. If the bank did continue to defend its currency peg, it would have had to buy a bunch of Euros, which would presumably drop in value if the European Central Bank began a QE-style bond buying program. The Swiss public was so afraid of this happening that Swiss National Bank President Thomas Jordan was forced to issue a statement back when the peg was instituted explaining why central banks don’t need to keep positive equity on its balance sheet at all times.

In other words, the Swiss National Bank’s move was influenced by politics more than economics. The long-term effects on the Swiss economy might not be all that harsh, as Swiss exporters have long dealt with the burden of a strong currency and the Swiss economy is relatively strong compared to its European peers. But the desire to tighten monetary policy in this environment isn’t justified by the facts on the ground, and the decision to head-fake the markets as the Swiss Bank did on Thursday makes very little sense at all.

GM, other carmakers slam the brakes on Russia deliveries as rouble slumps

Carmakers including General Motors GM and Jaguar Land Rover have stopped delivering to Russian dealerships in response to the sharp slide in the value of the rouble.

The Russian currency has been hammered by slumping oil prices and Western sanctions imposed over Moscow’s involvement in Ukraine, losing as much as 20 percent against the U.S. dollar this week and about half its value since the start of the year.

In an e-mailed statement to Fortune, a GM spokesman said that “in the past several weeks GM Russia has adjusted production to one shift in our St. Petersburg plant and increased vehicle prices to manage our business risk related to the volatility of the Ruble. As an additional measure, on December 16 we also temporarily suspended sales to dealers.”

Cadillac, Opel and Chevrolet vehicles already purchased by customers will be delivered at the agreed price, GM said, adding that it continued to monitor the situation.

Jaguar Land Rover, the British luxury carmaker owned by India’s Tata Motors, said its Russian sales subsidiary had stopped selling vehicles to franchised dealers on Wednesday and would review the situation again on Friday.

The rouble’s fall has prompted some companies that incur costs in other currencies, like Swedish furniture retailer IKEA, to increase the prices they charge Russian buyers. And this week Apple decided to stop online sales in rubles, citing volatility causing problems with pricing.

Volkswagen’s premium brand Audi said it was postponing vehicle deliveries and may raise prices.

Rival BMW said it had already been redirecting new vehicles to stronger markets since Russian car demand slump began in the summer, while also adjusting prices.

Russia had been expected to overtake Germany as Europe’s biggest auto market earlier this decade but that breakthrough has not happened and registrations are down 11.6 percent so far this year.

Then the price of oil—the commodity upon which the Russian economy is built—began to fall sharply, draining the nation’s economy of foreign money and crimping its growth. This dynamic drove the ruble sharply lower, culminating in an 11% drop on Monday, which forced Russia’s central bank to raise interest rates by a whopping 650 basis points, all but assuring a deep and painful recession in 2015.

But with strict sanctions in place against Russian companies—in response to Russia’s annexation of Crimea and hostilities with Ukraine earlier this year—and the continuous fall in oil prices, the interest rate hike did not satisfy traders, who sent the the ruble tumbling another 8% following the announcement.

The fall of the ruble has been swift and devastating. Carl Weinberg, chief economist at High Frequency Economics, referred to the currency’s plummet as “an unrecoverable spiral” in a note to clients on Tuesday. He argues that what we are seeing now is a classic “currency collapse,” brought on by both economic factors like sanctions and falling oil prices as well as financial factors like the Russian central bank printing money to help state-owned oil company Rosneft cover its debt denominated in foreign currencies.

What makes the situation in Russia that much worse is that the nation’s companies, both private and state-owned, hold $670 billion in debt denominated in foreign currencies. This debt is about one-third the size of the entire Russian economy, and it will become impossible for Russian companies to service it if the ruble continues to fall. Writes Weinberg:

The amount of rubles local borrowers have to give up to pay off foreign debt obligations just increased by 20 percent overnight, by 50 percent since the start of this month, and by 90% since the start of November…. The effective interest rate on foreign borrowing for Russians is over 6000%, enough to kill any economy.

Normally, when countries find themselves in a situation like Russia’s, they turn to the IMF, which would provide funding and debt restructuring in exchange for the enactment of economic reforms. But as University of Oregon economist Tim Duy writes, it’s tough to see either the IMF swooping in to help an international pariah like Russia or Vladimir Putin submitting to any reforms imposed by the West.

So, how will Russia’s currency crisis affect the U.S.? It’s tough to say for sure. A recession in Russia won’t have much of an effect on the American economy, as the two nations conduct very little trade with each other. But make no mistake, the crisis in Russia today is at least partially a result of the diplomatic policies of the United States. We are seeing the kind of economic misery the U.S. and Europe aimed to inflict on Russia as a result of its aggression in Ukraine.

The question now is whether the economic pain will convince Russia to back down, or double down, in Eastern Europe. Weinberg, for one, worries that Putin will instruct Russian companies to renege on their foreign obligations. This could spell bad news for banks and investors across Europe and the U.S. that have loaned money to Russian companies, and it could allow Russia’s financial instability to infect other emerging markets and the already shaky E.U. economy.

Neither rate hikes nor Putin’s diplomacy can stop ruble slide

Russia’s currency tumbled to new all-time lows against the dollar and euro Friday, with neither the central bank’s latest interest rate hike nor threats against ‘speculators’ from one of the country’s top cops able to stop the rout.

The seemingly unstoppable fall in the ruble is putting ever more pressure on banks that have borrowed heavily in dollars in the past, and which are struggling to meet demand for foreign currency from clients. In an effort to head off a full-scale banking crisis, the government is preparing a new round of recapitalization measures funded by the state’s rainy-day fund.

Under pressure from falling oil prices, the ruble has now lost over 9% this week alone against the dollar, even though the central bank Thursday raised its key interest rate by a full percentage point to 10.5% in an effort to support it.

The step satisfied neither economists, who said it wasn’t enough to turn the currency around, nor businesses, for whom credit will now get even more expensive even though the growth is shuddering to a halt. The central bank said Thursday it expects “virtually no growth” in the next two years, as low oil prices and restricted access to western capital markets choke off investment. It also said it expects inflation to top 10% at the start of next year.

Alexander Bastrykin, a top law-enforcement official who heads the Interior Ministry’s Investigative Committee, had made the most explicit threat yet to punish ‘speculators’ who manipulate the foreign exchange market, proposing tougher criminal penalties.

The turmoil at home took the gloss of a high-profile visit to India earlier this week by President Vladimir Putin. The visit ended in an agreement to make Russian helicopters in India, and expand direct ties between Alrosa, the world’s largest diamond miner, and Indian industry, but with no concrete deals in the crucial oil and gas sector.

Putin agreed with Indian PM Narendra Modi on expanding an agreement for Russia to build 10 or more nuclear reactors in India at a reported cost of $3 billion each. But that isn’t going to make any short-term difference to Russia’s economy. The one Russian-built plant currently operating in India at Kudankulam took over 25 years to build and launch. So far, despite an obvious need to upgrade its power generation nationwide, India hasn’t even identified a site for the second one.

New Starbucks latte and big bank fines — 5 things to know today

The markets are set for a lower open this morning after the S&P 500 index managed yet another record close in the final moments of Tuesday’s trading session. Today, look out for two major retailers releasing earnings, a new drink from Starbucks, and news that five global banks have settled with regulators for allegedly trying to rig foreign exchange markets. Plus, the Europeans are landing an unmanned craft on a comet! Here’s what else you need to know today.

1. Department store wars

Two of your favorite mall anchor stores are reporting earnings today: Macy’s M and JC Penney JCP. Macy’s, which reported this morning, beat expectations by earning $0.61. Revenue, though, was less than expected. JC Penney, which will report after the bell, is expecting to see a loss of around $0.80 per share. JC Penney has had a rough few years, and investors will be hoping to see signs of a turnaround, or at least some positive news in the report.

2. Currency troubles

Five banks — Citibank C, JPMorgan Chase Bank JPM, Royal Bank of Scotland, HSBC Bank HSBC and UBS — have settled with regulators over allegations they tried to rig foreign exchange markets. The fines in the settlement come to around $3.4 billion. Barclays Bank did not settle, and continues to be under investigation. This won’t do the financial sector any favors when it comes to its public image.

3. Drink up your pralines

Are you tired of the pumpkin spice latte? Are you not a fan of gingerbread? Does the idea of drinking anything eggnog flavored that isn’t filled with booze make you gag? Well, Starbucks SBUX still wants your money, and as such they company is introducing the Chestnut Praline latte today, the company’s first new holiday drink in five years. So grab a red cup and drink up.

4. U.S. and China reach another deal

A day after achieving an accord on trade, the U.S. and China have reached a deal on the environment. Both countries agreed to curb greenhouse gas emissions over the next two decades. This is the first time China has agreed to such a deal.

5. YouTube is creeping on Spotify

The Google GOOG subsidiary has signed a deal with Merlin, an organization representing many independent record companies. What could this mean? YouTube is closer to launching its own music streaming service, so similar streaming services should look out.

UK, U.S., Swiss close in on forex settlement with top banks

(REUTERS) – British and U.S. regulators are poised to levy hefty fines on leading banks in a landmark settlement after a year-long global investigation of allegations of collusion and manipulation in the foreign exchange market.

At least one of the six banks set to be named early on Wednesday by Britain’s Financial Conduct Authority (FCA) was still in 11th-hour negotiations over details of the deal, two sources close to the matter said.

The banks – UBS, Barclays , Royal Bank of Scotland, Citigroup, JPMorgan and HSBC – will only sign off on an expected combined penalty of 1.5 billion pounds ($2.4 billion) late on Tuesday, sources said.

It would be the first settlement over allegations of misconduct in the $5.3 trillion-a-day foreign exchange market.

The Wall Street Journal reported on Tuesday that Swiss financial regulator FINMA had sent warning letters to around 10 past and present UBS employees about potential enforcement action for alleged misconduct in the forex market.

A spokesman for FINMA declined to comment. Britain’s FCA also declined to comment.

U.S. regulators and FINMA are also expected to be among those close to concluding investigations. Any U.S. settlement is expected to name at least one other bank, a source told Reuters last week.

Bank of America has said it was in “advanced discussions” with U.S. bank regulators.

The U.S. Commodity Futures Trading Commission was likely to allege false reporting and manipulation, lawyers said, the two most applicable options under U.S. law, which it also used in its settlement over Libor benchmark rates.

This is in contrast to UK authorities, which can look at charges such as failure to put in place the right controls. The two U.S. banking regulators are likely to go after the banks for failing to prevent bad conduct.

The U.S. Office of the Comptroller of the Currency is likely to settle charges with Bank of America, Citi and JPMorgan.

The Federal Reserve will be responsible for any settlement with the units of the four foreign banks. But it was not clear whether the Fed would announce its deal at the same time.